Independent Contractor Work Agreement With Non Compete Clause In Oakland
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FAQ
As previously reported (Dentons Alert), the US Federal Trade Commission (“FTC”) issued a regulation earlier this year that effectively bans most non-competes for employees and independent contractors (the “FTC Rule”). The effective date of the FTC Rule is September 4, 2024.
The ban covers all non-competes for U.S. workers (including employees and independent contractors) with limited carve-outs, and is subject to certain exceptions based on the FTC's statutory authority.
Several factors can void or limit the enforceability of a non-compete agreement, including overly broad restrictions, unreasonable time frames or geographical limits, lack of consideration (such as compensation or job opportunities provided in exchange for the agreement), and violation of public policy.
Even workers labeled as “independent contractors”—who should have the freedom to work for multiple clients—are often required to sign non-competes that limit where they can work. Employers often present non-competes as a “take it or leave it” contract, forcing workers either to sign or forego employment.
Every state has its own law regarding the use of non-competes. For example, in California, they are deemed illegal, except when selling a business or a shareholder's stock or dissolution of a partnership; while in Florida, they are allowed but are subject to strict scrutiny.
As with many things, however, California is different. California law explicitly voids all non-compete agreements for employees and independent contractors. These agreements are simply not enforceable, no matter how reasonable they may seem.
Yes, if you have signed one with your employer. However, non-compete clauses are operable only for a reasonable period of time only even if the clause mentions otherwise.
Every state has its own law regarding the use of non-competes. For example, in California, they are deemed illegal, except when selling a business or a shareholder's stock or dissolution of a partnership; while in Florida, they are allowed but are subject to strict scrutiny.
